Applied Overhead Cost: The overhead cost estimated by the company during a particular period of time is called applied overhead cost. It is estimated based on the predetermined overhead rate specified by the company. If the actual overhead cost incurred on the production is more than the applied overhead cost estimated, the overhead cost is underapplied and if the actual overhead cost is less than the applied overhead cost, the overhead cost overapplied. An underapplied overhead cost increases the cost of goods sold and an overapplied overhead cost decreases the cost of goods sold. To determine : Journalizing the over applied or under applied overhead cost.

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Chapter 19, Problem 13E

To determine

Applied Overhead Cost:

The overhead cost estimated by the company during a particular period of time is called applied overhead cost. It is estimated based on the predetermined overhead rate specified by the company. If the actual overhead cost incurred on the production is more than the applied overhead cost estimated, the overhead cost is underapplied and if the actual overhead cost is less than the applied overhead cost, the overhead cost overapplied. An underapplied overhead cost increases the cost of goods sold and an overapplied overhead cost decreases the cost of goods sold.

To determine:

Journalizing the over applied or under applied overhead cost.

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